Page:The New International Encyclopædia 1st ed. v. 17.djvu/48

KENT. the labor ami capital (Mni)loyoil in ])ioilucing them. Assuniinj; the eoiulitions of a new com- niimity with an abumlanee of accessible land, yiiod and bad, it is obvious that so long as the produce of the best land is more than siillicient to satisfy the community's wants there will be no rent. " Troducers will l)e on an <'iiuali1y. and if any difference exists between the value of the |)rcidi"i(t and the costs of production in labor and capital, it will be the same for all. As population increases the product of the best grade of lands no hmger suHices to satisfy the want for food. I'riccs of food will rise until it will jiay to bring inferior lands under cultivation. IVrnianent prices will have to be sullieicnt to cover costs in lalior and capital upon these inferior lands. Since the cost of production on the better land does not increase, a surplus value will emerge in the produce of these lands. This surplus value is rent. If the owner of the better land cultivate the ground not in person, but by tenants, this surplus is what the latter can afford to pay the landlord for the use of his land. If the favored pro- ducers are themselves cultivators, they receive the rent directly in the increased returns of their husbandry. This simple illustration suffices to explain the law of rent, which nuiy be brielly stated as fol- lows: Kent of land is the dill'ercnee between the cost of the i)roduet and its value, the latter being determined by the cost of production upon the poorest land cultivated. In an isolated eom- nuiiiity the increase of population and the re- sulting pressure upon the food supply must always enhance I'ent, as cultivation must be ex- tended from better to poorer soils. In other words, the pressure of population upon the means of subsistence creates rent on those lands where the means of subsistence can most easily be produced. Again we may assume all the available land of the community to be in culti- vation and yet the pressure upon the means of subsistence increases. Now even if all the land were uniform in quality but deficient in quantity rent nuist appear. Xo increase of prodict can be obtained without application of additional labor and eajiital to the soil. This Avill not be so fruitful as the first application, and hence the latter must yield a rent. In this phase the law of rent may be stated as follows: The rent of land is the difference between the value of the product and its costs, value being determined by the costs of ])roduction for the ])roduct diie to the least fruitftil increment of capital and labor em- ployed in cultivation. It follows that rent is a result, not a cause of price. This principle was demonstrated by Eieardo and until recent de- cades was thought to establish a perfectly clear distinction between rent and other economic in- comes. The rise of the Austrian school of econ- omists (see Political Economy) has, however, tended to break down this distinction in incomes. Labor and capital, like land, receive their value from llieir ))roduet. While it is true that no form of goods will 'ong be produced which does not pay the prevailing rates of interest and wages, it is no less true that an agricultural product will not be produced unless it pays the ordinary rate of rent. One of the most important practical principles that have been deduced from the demonstration of the law of rent is that a tax levied upon rent 32 KENT. or upon the value of land, which represents merely the capitalization of the rental value, cannot raise the price to the consumer of the product of the land. This principle has served as a basis for the plan of social reform of Henry George. (See SiKoiJi Tax.) The tact that every increase in population or in ea])ital increases the return to the landlord ipiite without his own cITorts served as an ethical justification for a plan of appropriation to the State of ground rents. Kecent economic theory has widely ex- tended the ap]ilieation of the theory of rent. Since tlic time of Senior (q.v. ) the term has been fre- quently iip])lied to the net income from monopoly advantages, whether natural or legal. Profits (q.v.) are frequently classed as a form of rent; and Clark applies the term to any form of in- come which may be described differentially. In the language of Marshall, "the rent of land is no unique fact, but simply the chief species of a large genus of economic phe- nomena; the theory of the rent of land is no isolated economic doctrine, but merely one of the chief applications of a particular corollary from the general theory of demand and supplj'." The theory of the rent of land occupies a large space in all systematic presentations of political economy. A compact statement is found in Walker, Land and Its Rent (Boston, 188.3). RENT. In its most ancient as well as its modern sense, compensation payable by a tenant to his landlord for the land held of him. Rent has never been an incident of tenure, biit even under the feudal system of land-holding and when due from tenant in fee simple to his lord, rent was due only as matter of contract. It was, indeed, the service agreed by the feudal tenant to be per- formed {servilhim rcdditum) , which might or might not include a money payment, and which varied according to the tenure upon which the land was held, according to the custom of the manor of which it formed a part, or according to the will of the parties. In much the same way the obligation of the modern tenant for life or years to pay rent to his landlord is based entirely on agreement expressed in the lease or implied from the acts .of the parties as to the time and manner as well as the duty of payment. This being so, a failure to pay rent does not ordinarily alTect the relation of landlord and tenant so as to enable the land- lord to enter and terminate the lease, nor can a tenant by terminating the relation of tenure between himself and his landlord (as by assign- ing his entire estate to a third person) relieve himself of the obligation to pay the rent agreed. Rent is equally independent of any other viola- tions of duty by either party, excepting only the breach of the covenant for quiet enjoyment im- plied in every letting of lands. As already indicated, a failure to pay rent does not in and of itself involve a forfeiture of the tenant's estate. The landlord's proper remedy is an action at law for the rent due. At common law, however, he was provided with a more etfi- cacious remedy in the ])rocess known as levying a distress. See Distre.ss. The rents described by Blackstone in his famous chapter on incorporeal hereditaments (Blackstone II. 41-43), as "certain profits issu- ing yearly out of lands and tenements corporeal, are obviously a very different thing from those which have just been described. The rent here